JonesTrading maintained its Buy rating and $7.50 price target on KEEL (NASDAQ: KEEL) , the former Bitfarms, in a note Thursday. The note followed KEEL's third-quarter results , in which revenue fell 59% from a year earlier and 9% from the second quarter, to $27.6 million. The target implies about 257% upside from Wednesday's $2.10 close.
Analyst Kevin Dede wrote that KEEL no longer expects to announce HPC leases this year, which drops its goal of three deals for three sites. All third-quarter revenue came from bitcoin mining in Quebec, and the company has no HPC contracts. Dede left his estimates unchanged, including 2027 revenue of $65.9 million, because JonesTrading never modeled lease revenue.
Dede blamed Pennsylvania's August executive order, which changed backup power requirements and removed data centers from fast-track permitting. The order forced redesigns at Sharon (110MW gross) and Panther Creek (350MW gross), a delay KEEL initially said would not occur. KEEL's November presentation still puts Pennsylvania power delivery in 2027, with energization ramping through 2028.
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The $736 million cross-check
Dede said the target rests primarily on the stock's prior trading range, supported by 478MW of secured power. As a cross-check, he converts that gross figure at a 1.3 PUE to about 368MW of critical IT and applies roughly $2 million of annual revenue per critical IT MW. That gives about $736 million of annual recurring revenue, and a 10x multiple puts enterprise value near $7.4 billion, or about $10.60 per share after cash and full dilution.
The revenue rate works out to about $166.67/kW-month. Dede applies it to the full portfolio, none of which is leased, and his note says pricing and ready-for-service dates are set only at signing. For comparison, Hut 8 projects average stabilized NOI of $655 million on its second 352MW IT lease at Beacon Point, about $1.86 million per IT MW, under a 15-year triple-net lease with 3% escalators.
The cross-check also takes no deduction for construction cost. KEEL's 10-Q lists $380.2 million of HPC capital commitments through 2028 and says the full buildout needs significant capital beyond the roughly $780 million of cash it held on November 4. CFO Jonathan Mir said KEEL has "no current need for debt or equity financing before signing a lease."
KEEL had 617.9 million shares outstanding on November 4. Its unsecured convertibles, $588 million at 1.375% due 2031 and $458 million at 1.25% due 2032, convert at about $6.86 and $7.41, both below the $10.60 output, and the filing counts 147.5 million convertible-note shares among 176.1 million potentially dilutive securities.
Dede said the $7.50 target embeds a discount for lease timing and execution risk. He named permitting or lease delays, financing costs, construction overruns, Pennsylvania policy and equity dilution as the main risks. KBW, by contrast, holds a $3 target built on a 6.8% cap rate on stabilized NOI, and it assumes a further $500 million equity raise.
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JonesTrading discloses that in the past 12 months it managed or co-managed a KEEL public offering and received investment-banking compensation from the company. It also expects to receive or intends to seek such compensation in the next three months.
